The blue-chip Dow Jones Industrial Average tumbled 96.28 points (0.98 per cent) at 9,774.02 in final trades, a day after Wall Street shares posted one of the biggest sell-offs in more than a year on waning US consumer confidence.
The tech-rich Nasdaq index slipped 25.94 points (1.21 per cent) to 2,109.24 and the broad-market S&P 500 index dipped 10.53 points (1.01 per cent) to 1,030.71.
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Just before the opening bell, payrolls firm ADP said US nonfarm private employment increased 13,000 in June, much less than expected.
Most economists had expected 61,000 jobs to be opened up this month.
"ADP report came in worse than expected, increasing concerns for the second half growth outlook," analysts at Briefing.com said in a note to clients.
The ADP report "unnerved investors ahead of Friday's labour report," analysts at Charles Schwab & Co said in a separate note.
The ADP data came ahead of a national unemployment report together with nonfarm payroll data to be released by the US Labor Department on Friday.
The government will probably report June total payrolls dropped by 100,000, following a jump of 431,000 in May, most economists said.
The June unemployment rate is projected to edge up to 9.8 per cent from 9.7 per cent in May.
The ADP survey tracks only private-sector jobs, while the Labour Department's nonfarm payroll data, include government workers.
Eurozone financial market concerns also dampened market sentiment.Moody's Investor Service warned Spain on Wednesday it had placed the country's sovereign debt rating "on review for possible downgrade" due to the weak growth prospects of its fragile economy.
The credit rating agency said it could lower Spain's AAA rating by "one, or at most two, notches" at the end of the three-month review period.
